What is the definition of 'Transfer' according to the Alloy Development Agreement?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
of first refusal provided for in subparagraph 11.F must be made by submission of our form of application for consent to transfer, which must be accompanied by the documents we request and other required information. The application must indicate whether you or an Owner proposes to retain a security interest in the property to be transferred. No security interest may be retained or created, however, without our prior written consent and except upon conditions acceptable to us. Any agreement used in connection with a transfer will be subject to our prior written approval, which approval will not be withheld unreasonably. You immediately must notify us of any proposed transfer and must submit promptly to us the application for consent to transfer and any other required documents and information. Any attempted transfer by you without our prior written consent or otherwise not in compliance with the terms of this Agreement will be void, your interest in this Agreement will be voluntarily abandoned, and it will provide us with the right to elect either to deem you in default and terminate this Agreement or to collect from you and the guarantors a transfer fee equal to two times the transfe
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
Based on the 2025 Alloy Franchise Disclosure Document, the document discusses 'transfer' in the context of the Development Agreement, but it does not provide a specific definition of the term. Instead, it outlines the conditions and procedures required for a transfer to occur.
Specifically, if a franchisee wishes to transfer their rights under the Development Agreement, they must first seek Alloy's written consent. The application for consent must disclose any security interest the franchisee or an owner plans to retain in the transferred property. Alloy's approval of any transfer agreement will not be unreasonably withheld. The franchisee must promptly notify Alloy of any proposed transfer and submit the application for consent along with any other required documentation.
Attempting to transfer the agreement without Alloy's prior written consent, or failing to comply with the agreement's terms, will render the transfer void. In such cases, Alloy can either consider the agreement abandoned and terminate it, or collect a transfer fee equal to two times the amount specified in subparagraph 11.C, which, based on the document, would be $10,000. Therefore, the transfer fee would be $20,000. A prospective franchisee should ask Alloy for a precise definition of 'transfer' to fully understand what actions would be subject to these restrictions and requirements.